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Introduction to

WFP. NEW BUSINESS MODEL. Introduction to. New Business Model. WFP. NEW BUSINESS MODEL. Review of the New Processes. WFP. NEW BUSINESS MODEL.

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Introduction to

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  1. WFP NEW BUSINESS MODEL Introduction to New Business Model

  2. WFP NEW BUSINESS MODEL Review of the New Processes

  3. WFP NEW BUSINESS MODEL To introduce the New Business Model (NBM) approach to Country Office project management, highlighting the operational implications and automated tools. NBM Objective Module Outline: • Provide CD's a basic understanding of the NBM concepts and processes (i.e. calendarised project planning ( $ and MT), determining implementation level, external and internal advance funding mechanisms) • Discuss accountabilities, risks and oversight related to the NBM • Demonstrate the PPT and its implementation in the CO • ODC’s Roll-out Strategy

  4. WFP NEW BUSINESS MODEL NBM Objective Two main objectives: Objective Key Levers • Requirements & Income Planning • Donation Forecasting • Direct ownership of resource management at field level • PPT ( Project Planning Tool) • Maximize utilization of resources destined to a project 1 2 • Improve on-time delivery of food aid in-country • Internal and external Working Capital Financing. • SCO (Supply Chain Optimization )

  5. WFP NEW BUSINESS MODEL NBM Objective Objectives obtained through • Strengtheningfinancial and resource management • Introducingcalendarised requirementsfor tonnage and financial resources • Introducingcalendariseddonation forecaststo plan for availability of resources and realistic implementation level • Providinginternal and external borrowing • Settingstandardsfor corporate reportingand operational reviews • Introducingnew toolsto support the new processes

  6. New Business Model: Key Concepts • Accurate Donation Forecasting • Pre-financing • Operational Requirements Planning • Monthly and Quarterly Reviews Legend: Forecasted Contributions $ Income Requirements Advance Funding Advance Funding Expected Shortfalls Confirmed Contributions Time Food Typical Distribution of Expenses over Project Life Cycle External Transport LTSH DSC, ODOC Project Closure Project Creation

  7. New Business Model: Relation to other initiatives WINGS II WINGS II WINGS II Systems and practices Supply Chain Management Resource Mobilization Project Management Accounting & Financial Reporting PSA Management HR Management Strategic & Management Planning processes (WINGS II) Supply Chain Optimization (SCO) Best Business Practices (BPP) Common M&E (CMEA) Business Process Review (BPR) processes “initiatives” SAP COMPAS OMS RMS PPT systems/tools

  8. WFP NEW BUSINESS MODEL Rollout Strategy • The field rollout will run from October 2006 to January 2007 • The rollout will be conducted in 3 phases • Levels of authority are different between phase 1 to 3 • The Country Office (CO) will require certain pre-requisites to be eligible for Phases 2 and 3 of the training • The size and capacity of the operation in a CO should play a part in deciding what phase/level of training a CO will require • ODMB assisted the Regional Financial Analysts (RFAs) in classifying the CO’s in their respective region but the final decision was taken by the RFA and CO

  9. WFP NEW BUSINESS MODEL What does ODMB plan to rollout? • The Project Planning Tool (PPT) • Programme Module • Finance Module • Logistics Module • Lead Time Module • Assignment Module • Management Module • Report Module • Decentralized Resource Assignment Planning • Donor Forecasting • Supply Chain Optimization • The Best Practice Project (BPP) • Revised Pre-financing Mechanism • Guidelines on the role of the Project Fund Manager and Fund Administrator for LTSH, ODOC and DSC

  10. WFP NEW BUSINESS MODEL Roles & Responsibilities working within the environment

  11. Continuous Monthly Review Quarterly Review Frequency Roles of the Project Management Team Project Management Team Single Country Operations: Country Office Regional Operations: Regional Bureau SUBMISSION OF REPORTS Project Management Team Country Office Regional Bureau Management Reports Country Director Regional Director HQ Finance unit Logistics unit Project Planning Tool (PPT) Endorsement inputs Programme unit Pipeline unit Pre-financing requests Mailbox To CFOB for DSC/ODOC AF To ODMP for IRA To OEDSP for WCF

  12. WFP NEW BUSINESS MODEL Donor Contributions Forecast

  13. Forecasting Analysis of previous funding trends Knowledge of priority countries / sectors and programmes Informal Discussions with donors Forecast Only a forecast! – not cast in stone For decentralised donors (e.g. ECHO, DFID), CO will have better insight and therefore will play a primary role Needs to be continuously updated

  14. $ Amount Forecast ? Probability Timing

  15. WFP NEW BUSINESS MODEL Decentralized Resource AssignmentPlanning

  16. WFP NEW BUSINESS MODEL What are the benefits of decentralising Resource Assignment Planning? To support improved project management by enabling the CO to: • Identify mismatches between contributions and requirements • Plan to address shortfalls in project implementation • Proactively manage and adjust implementation plans • Align responsibilities with accountabilities

  17. WFP NEW BUSINESS MODEL RESOURCE ASSIGNMENT: WHAT’S NEW? CURRENT WITH NBM

  18. WFP NEW BUSINESS MODEL ODMP’S CONTRIBUTION TO THE NBM ROLL OUT

  19. LONG TERM ROLE OF ODMP UNDER NBM Overall management of multilateral contributions Co-ordinate multi-country funding proposals for FD Management of development portfolio Advice on project plans, budget revisions, PRC. Resource transfer Pre-filling of pipeline Quarterly operational review analysis and follow up. Stream-lining on Advance Funding mechanism. Management of IRA 2nd level backstopping and oversight of decentralised programming/PPT Processing PR, technical programming, clearing budget revisions in WINGS, clears budget plan after PRC

  20. WFP NEW BUSINESS MODEL Summary • Most tasks associated with decentralised resource assignment planning and managing funds will be done at the CO level with RB for back up. • ODMP will assist this decentralisation with training, support and advice • ODMP’s role will shift and incorporate some new tasks and responsibilities to do with corporate oversight, operational review, advance finance as well as continue with some of their current responsibilities.

  21. WFP NEW BUSINESS MODEL Review of the Internal & External Pre-Financing Mechanisms

  22. WFP NEW BUSINESS MODEL The Current Mechanisms • IRA: Advances for unexpected emergencies and to start new programmes quickly. • DSCAF: Advances for DSC & ODOC to maintain operational capacity before support costs can be charged against projects. • WCF: Advances to operations during normal business – leverages the surplus cash of WFP to improve efficiency. • CERF: UN Mechanism designed to fund early action in emergencies and chronically under-funded crises. • Internal Financing: Borrowing cash resources from different associated costs within a specific project.

  23. WFP NEW BUSINESS MODEL The New Proposal Internal Financing • A streamlined process for the RBs and COs making the loan request • Authority for approval and oversight of requests based on the threshold value of the loan • MAILBOX – single organizational point to collect all requests and process all data relating to advance funding

  24. WFP NEW BUSINESS MODEL Supply Chain Optimization

  25. HQ Process improvements • Streamlining of HQ Supply Chain processes • Ensure short and reliable HQ lead times for COs • Introduce standards and measure performance Field Survey RTA management • Restore the original meaning/use of the Requested Time of Arrival (RTA), i.e. • CO communication to HQ about needs and desired arrival time/service Field interviews Lead Time Tool • Active management of Lead Times from historical data • Provide COs with better planning info for arrivals of food commodities HQ Process and data analysis Supply Chain Officer(s) • Organization improvements through introduction of Supply Chain Officers • Increase accountability towards COs for on time availability of food 4 MAIN LEVERS FOR IMPROVEMENT Main assessment and analysis means Critical areas of intervention identified Four main levers for improvement/proposed changes • Assessment and analysis highlighted that there are several areas for improvement in the service HQ provides to the field • The initial main focus of these improvements will be on internationally procured commodities • in kind contributions currently leave limited space for intervention The identified levers for improvement and proposed changes were fine-tuned and validated with the ODK supply chain staff in August 2006, receiving overall a very positive feedback

  26. WFP NEW BUSINESS MODEL Overview of the PPT

  27. New Business Model: Project Planning Tool Pipeline WINGS COMPAS RMS supply chain optimization LOGISTICS FINANCE PROGRAMME databases, etc. DSC planning mt planning check entry entry lead times ODOC planning check entry inventory check upstream inputs check loans & rep. LTSH planning entry reports reports reports food availability contributions confirmed confirmed Management Module Advance Financing incl. forecast incl. forecast reports Needs & Shortfalls PCA plan vs. exp. WCF status Financial Summary

  28. WFP NEW BUSINESS MODEL Lessons Learnt from NBM Pilots

  29. WFP NEW BUSINESS MODEL System related • POs released by CO/RB in WINGS failed to recognize the full obligation at the time the commitment was made • Reduction or cancellation of PO's freed-up budget, which led to double spending • Tenders for transportation contracts were issued without corresponding fund reservations (lacking sufficient budget)

  30. WFP NEW BUSINESS MODEL Resource related • Weak communication link between CO/RB units; logistics, financial analysis and finance unit to monitor obligations against resources • Failure to secure full cost recovery on specific contributions of which COs were not aware • Resource Transfer - commodities remaining from the initial operation were transferred to the successor operation with insufficient associated costs • Irregular LTSH reviews • Donor Pressure

  31. WFP NEW BUSINESS MODEL Post Rollout Back-Stopping

  32. WFP NEW BUSINESS MODEL Back-Stopping • One necessary foundation for a successful sustainable rollout of NBM is to provide sufficient backstopping and support to RBs and COs • It is also important to identify functions and tasks of those involved in the post rollout phase to ensure: • a streamlined and efficient process • avoid overlapping and confusion

  33. New Business Model: Post Rollout Backstopping First Level Second Level First Level

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